Jaipal Reddy defends Rs 767cr helping hand to builder

Urban development minister S. Jaipal Reddy on Thursday defended the DDA decision to stick by builder Emaar-MGF, despite the latter failing to honour their commitments relating to the Games Village. Nagendar Sharma and Moushumi Das Gupta report. All OC forex deals to be probed | What went wrong

Urban development minister S. Jaipal Reddy on Thursday defended the Delhi Development Authority's (DDA) decision to stick by builder Emaar-MGF, despite the latter failing to honour their commitments relating to the Games Village.

The builder fell short of funds during the economic downturn and had to be bailed out by the DDA which advanced them a sum of R766.89 crore to enable them to complete the work.

“There was no bailout,” said Reddy. “It was a buy back arrangement by the DDA to enable the developer to complete the Games Village.”

“Giving the contract to any other contractor at that stage would have meant huge delays,” Reddy added. Reddy’s ministry and the DDA have been criticised for persisting with Emaar-MGF and supporting them financially. Despite the support, the builder failed to meet the April 2010 deadline for getting the Village, delivering it only in September.

With the Games over, Reddy on Wednesday gave the DDA the green signal to confiscate the builder’s bank guarantee of R183 crore for ‘deficiencies’ in completing the project.

Reddy claimed the DDA would make a profit of more than R300 crore from the Village apartments despite the buyback. Curiously, however, the Comptroller and Auditor General in a May 2010 report to Parliament had maintained that the DDA lost R150 crore on the flats.

The Central Vigilance Commission (CVC) on Thursday started probing irregularities in the construction of 2,700 flats in Vasant Kung being constructed by the DDA. These were to accommodate around 3,000 foreign and Indian technical staff for the mega event, but the DDA could not ready them on time. In the end, only 600 completed rooms were used to accommodate Indian technical staff.

The CVC is looking into the way the DDA went about this project. There have been complaints that construction work of 18 blocks was handed over to a private construction company without inviting tenders and despite having saved 45 days of technical work in the process, the work could not be completed in time.

HT has learnt that the DDA began the necessary paper work for mandatory clearances late and soon faced problems with the contractors who were initially awarded the contract. The private construction companies had virtually abandoned the Vasant Kunj project in July and had made it clear to the DDA that it would not be possible to complete the work on time.

But the DDA officials kept even the ministers involved in the dark It was only at the eleventh hour when it became evident that the flats would not be ready in time that the OC started scouting for hotels rooms to accommodate the 3,000 technicians.